From making a choice between which chocolate to buy to importing paper for the central bank to print that currency note, I have always believed that principles of economics are omnipresent. This is the fact fascinates me the most and led me to analyze the movie, Charlie and the Chocolate Factory from an economic perspective. Directed by Tim burton, the storyline revolves around a boy named Charlie who gets a golden opportunity to take a tour of Willy Wonka’s chocolate factory along with 4 other children. Now let’s delve deep in some intriguing yet simple economic principles used in the movie.
1. Scarcity
Scarcity refers to the limitation of supply in relation to demand. It arises the problem of choice making and economizing of resources. The sole reasons behind scarcity include limited resources, boundless human wants, and alternative uses of these resources. In the movie, only 5 tickets were present in millions of chocolate bars.
There was excessive demand for the tickets but only limited supply leading to scarcity. Charlie Bucket’s family survived with a very low income. They resided in a dilapidated house and had been consuming clear soup with cabbage as their meal for a long time. There is only one working person, Charlie’s father, who is supporting the entire family of 7 members including him. This reflects the scarcity of resources present with the family which leads to a low standard of living.
2. International trade
Willy Wonka encouraged international trade as the packaged boxes of candies were exported to distinct locations such as London, New York, Cairo. Tokyo etc. In addition, the children who found the golden ticket also belonged to different places.
3. Industrial Espionage
When in pursuit of competitive advantage, a company sends a spy to unravel the secrets of a rival company, it is known as industrial espionage. As Willy Wonka’s Chocolate Factory was achieving great success, other manufacturers such as Fickelgruber, Prodnose, Slugworth, etc started sending in spies as employees to attain the secret recipe for varied commodities. This led to him becoming prey to genericide and losing the uniqueness of his products.
4. Unemployment
Due to industrial espionage, Willy Wonka decided to close his factory until he found a solution and fired every single worker. Furthermore, Charlie’s father lost his job at the toothpaste factory due to advancements in technology which is termed as structural unemployment.
5. Barter System
Barter system refers to the exchanging of goods and services without involving money. When the candy bars were available in the market, people started exchanging their animals including hen and goat in return for one chocolate bar.
6. Opportunity Cost
It refers to the value of the next best alternative foregone. In the whole movie, the principle of opportunity cost could be noticed multiple times. When Charlie found a note on the pavement, he could have used it to buy essential goods for his family but he decided to buy the Wonka bar. Thus, buying essential goods would be the opportunity cost. In addition, he decided to keep the ticket with him but he could have sold it to someone as his family needed the money more, making the latter, opportunity cost.
7. Derived Demand
A change in demand for a certain commodity will lead to a change in demand for others.
In the movie, the demand for chocolates increased highly and thus people started generating cavities. In order to resolve this issue, the demand for toothpaste also increased. Thus, chocolate and toothpaste have derived demand.
8. Determinants of demand
Violet shifted from chewing gums to Wonka bar in the hope to receive the golden ticket. This showcases a change in her taste and preferences which leads to an increase in demand for the chocolate bar. As the income of Verruca’s dad was high, hence he was able to buy thousands of bars indicating income as a determinant of demand.
9. Division of labor
One of the most important factors of production-labor, the Oompa Loompas are given different tasks to perform in which they specialize to get the best outcomes and increase productivity.
